The three major indexes are on track to finish flat this week, as mixed data has been released. Overall, the S&P 500 is up by about 1.4% in August, making it the fourth positive month in a row. The market is likely still digesting Fed Chairman Jerome Powell's speech from last week's Jackson Hole Meeting, as well as fresh economic data. Looking ahead to next week, Friday will be a significant day, as the critical August jobs report is expected to be released, which may influence the Fed's thinking when it meets on September 16-17.
In economic news, the Federal Reserve's preferred inflation measure, the Personal Consumption Expenditures Price Index (PCE), showed that core inflation (which excludes food and energy costs) was 2.9%, up 0.2 percentage points from June. This number met expectations but remains higher than the Fed's target of 2%. Consumer spending increased by 0.5% in July, in line with forecasts. Prices for energy goods and services declined 2.7% annually. The University of Michigan's consumer sentiment survey, released on Friday, indicated that year-ahead inflation expectations increased from 4.5% in July to 4.8%. Jobless claims were reported on Wednesday, with the number of claims falling by 5,000 to 229,000. Taking all the economic data into account, Federal Reserve Chair Jerome Powell suggested last week that due to weakening labor market data, a rate cut is likely.
In corporate news, Nvidia's highly anticipated earnings announcement came in on Wednesday evening. The company beat revenue and earnings estimates and raised its forecast for next quarter's revenue. Notably, this past quarter marks nine straight quarters of exceeding 50% revenue growth. Nvidia saw continued growth in its Blackwell chips (which make up roughly 85% of revenue), and CEO Jensen Huang has noted that its ramp-up is at "full speed." This is a bullish sign for AI and the US economy. GM made headlines this week in announcing the members of its newly formed Cadillac Formula One (F1) racing team: 10-time Grand Prix winner Valtteri Bottas and six-time winner Sergio Perez. This team is GM's 11th team in Formula One, bringing their total F1 investment up to $1 billion. As F1 racing continues to grow in the US and internationally, GM views this as an opportunity to market its vehicles globally.
In closing, I turn to the Fall of 1951 in County Wexford, Ireland. It's here that the managing director of Guinness Breweries, Sir Hugh Beaver, went on a shooting party and conceived a brilliant literary idea. After consecutive missed shots at a golden plover, he reasoned that this game bird must be one of the fastest in Europe, and a heated argument soon ensued amongst his company of friends. Drawn to competition and having an analytical mind, he figured there must be many other unsettled debates, and there is no definitive book to confirm these facts. Within a few years, he commissioned two employees from a fact-finding agency in London to compile a book of records that became known as the first Guinness Book of Records. This past Wednesday marked the 70th anniversary of the first publication, which was released on August 27, 1955, and within a few months, it appeared on the bestseller list. Within a year, it reached the United States and sold almost 100,000 copies. In celebration of the anniversary, Guinness is challenging fans to take on 70 record titles that have yet to have a record holder. Among them are the fastest 400-meter sack race, the farthest distance to bounce a coin into a cup, the most high-fives in 30 seconds, and many others. Of all the entertaining records, I'm sure Sir Hugh Beaver would be most interested in the fastest game bird: the red-breasted merganser.
Ryan Motsinger
